Canadian Firm Figment Explains how Cosmos based Provenance Blockchain Supports Nascent DeFi Ecosystem

Provenance is a Cosmos-powered blockchain whose goal is to create a “vibrant” ecosystem of decentralized financial (DeFi) services for a variety of financial institutions such as asset originators, fund managers, servicers, banks, and investors.

The Proof of Stake (PoS) blockchain is “distinguished by three elements: modules, smart contracts, and a contract execution environment,” according to an update from Figment, a Toronto based platform that serves as your key to Web 3 to stake tokens, build applications, and participate in blockchain governance.

These three elements work together in order to form a blockchain or DLT network that makes DeFi application building “accessible to all,” the Figment team explains.

Provenance’s main layers include modules, smart contracts, and a contract execution environment (CEE), the Figment team notes. They also mentioned that the Modules provide the process for financial applications “built on top of Provenance.”

By assuring communication and responding to queries, modules are “a core part of the blockchain functionality.” And second, the Smart Contract engine “allows the deployment of Provenance smart contracts.” Based on CosmWasm, the Provenance engine “allows tokens to be directly sent to a contract without triggering any contract code.”

And finally, the Contract Execution Environment is “an optional layer that focuses on data privacy.”

As previously reported, the organization behind Provenance is Figure, a Fintech that functions in the mortgage market. Established in 2018 and based in California, US, Figure is led by company CEO Mike Cagney and COO June Ou.

Figure says its goal or mission is to transform existing financial services by leveraging blockchain or DLT.

In addition to Figure, Provenance is being supported by the Provenance Blockchain Foundation, a non-profit entity that manages, supports, and funds the Provenance ecosystem.

As noted by Figment, a Canadian firm that aims to support the adoption, growth and long term success of the Web 3 ecosystem, members of the Foundation are all stakers of HASH. In terms of funding, there is “an initial allocation of 1.3 billion HASH as well as 2% of transaction fees (in HASH) directed to the Foundation,” the Figment team revealed.

They also commented on the transparency and liquidity for blockchain-enabled financial services.

As noted by Figment:

“In today’s traditional financial world, the exchange of loans is characterized by opaque, complex and time- consuming processes. Provenance aims to radically transform this market by becoming highly efficient and transparent for loan originators, investors and regulators. Using blockchain technology, the network will bring reliability and immutability to inspire confidence in market participants. This technology ultimately creates new value and liquidity.”

For instance, the Provenance Loan Marketplace has integrated two- factor authentication along with digital certificates for identity. This helps with instilling confidence in users “through a high standard of security practices.”

All records are immutable and transparent, and all transactions may be traced.

As explained by Figment:

“Being a standard for every blockchain, this is particularly more important for financial institutions and customers that trade loan purchase agreements (LPAs) and HELOCs (home equity line of credit) due to the increased transparency and lower friction.”

The Figment team also noted that the Provenance Loan Marketplace is quite valuable because of its tech innovations. Customers are able to take advantage of the efficiency, transparency and security of “executing orders seamlessly.” With blockchain or DLT, Provenance introduces secondary market liquidity, real-time remittance, real-time bilateral settlement, comprehensive, electronic loan documentation, and reduced custody and servicing expense.

It also offers real-time asset performance information and the ability to resell participation interests in loan pools.

This year, Provenance Marketplace “already supported more than $1 billion in HELOCs and LPAs,” the Figment team noted while adding that loan origination is the first “major financial activity on Provenance.”

In the future, there should be other financial activities involving:

  • Financing and trading
  • Banking and payments
  • Securities exchanges
  • Application Use Cases

According to Figment:

“Provenance revolutionizes how crypto-assets are issued, accessed and exchanged between financial institutions. Therefore, other decentralized finance (DeFi) applications are being developed on Provenance to create a rich ecosystem of financial services for companies and individuals.”

The Figment team added:

“In addition to Provenance Loan Marketplace, there is Adnales, a cap table management and valuation building on immutable records and instant traceability for companies looking to better manage equity offerings. Furthermore, Figure Pay is a gateway application between blockchain and traditional payment platforms.”

They also mentioned:

“Finally, Figure eVault is a platform for immutable records of documents with encrypted keys. In brief, these applications have chosen to build on top of Provenance for a specific reason: be the core building blocks that support institutions and individuals using financial services through Provenance blockchain.”

For more details on this update about Provenance from Figment, check here.

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